Newark Landlords Agree to Pay $430,000 to Settle Allegations of Collecting Excess Rent in Sparrow Run
WILMINGTON, Del. – U.S. Attorney David C. Weiss announced today that landlords Goodfish Enterprises, LLC; Reliant Property Management Company; and Christopher Lukacs have agreed to pay $430,000 to resolve allegations that they violated the False Claims Act during their participation in the U.S. Department of Housing and Urban Development’s Housing Choice Voucher Program (HCVP), commonly known as “Section 8.” The HCVP is the federal government’s primary program for helping low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market.
Goodfish, Reliant, and Lukacs own more than 90 properties in the Sparrow Run housing development in Newark, Delaware, many of which have been leased to low-income residents receiving rental assistance through the HCVP. HCVP regulations require landlords to certify that they are not charging a higher rent to HCVP tenants than they charge to unassisted tenants in comparable housing units. In a lawsuit filed in December 2020, the United States alleged that, going back to at least January 2015, Goodfish, Reliant, and Lukacs had charged HCVP participants higher rents than unassisted tenants. The United States also alleged that Goodfish and Lukacs provided false information on HCVP forms regarding the rents they received from unassisted tenants to justify the inflated rents they sought to charge for HCVP rentals. As part of the settlement agreement, Reliant and Goodfish also agreed to reduce the rents being charged to certain current tenants.
“By illegally charging higher rents to residents receiving housing assistance than to residents who require no assistance, landlords overcharge the federal government and take money that should be used to help additional needy families,” said U.S. Attorney Weiss. “This settlement demonstrates that, together with our agency partners, my office will aggressively pursue those who attempt to profit by ignoring the laws that ensure that public money is not wasted.”
“The Department of Housing and Urban Development, Office of Inspector General is committed to working with the Department of Justice and our law enforcement and housing partners to ensure that federal funds intended to help low-income families are not wasted or misapplied,” said Special Agent-in-Charge Shawn Rice. “HUD OIG also commends the New Castle County Police and the New Castle County Housing Authority who provided assistance in this investigation. Today’s settlement demonstrates the Government’s commitment to protecting the integrity of HUD programs against fraud, waste, or abuse.”
This matter was investigated by the U.S. Department of Housing and Urban Development Office of Inspector General. The litigation was handled by Assistant U.S. Attorney Dylan J. Steinberg.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Delaware. Related court documents and information is located on the website of the District Court for the District of Delaware or on PACER by searching for Case No. 20-cv-01722-RGA.